Placing the poor while keeping the rich in their place

A central objective of modern US housing policy is deconcentrating poverty through "housing mobility programs" that move poor families into middle class neighborhoods. Pursuing these policies too aggressively risks inducing middle class flight, but being too cautious squanders the opportunity to help more poor families. This paper presents a stylized dynamicoptimization model that captures this tension. With base-caseparameter values, cost considerations limit mobility programs before flight becomes excessive. However, for modest departures reflecting stronger flight tendencies and/or weaker destination neighborhoods, other outcomes emerge. In particular, we find state-dependence and multiple equilibria, including both de-populated and oversized outcomes. For certain sets of parameters there exists a Skiba point that separates initial conditions for which the optimal strategy leads to substantial flight and depopulation from those for which the optimal strategy retains or even expands the middle class population. These results suggest the value of estimating middle-class neighborhoods' "carrying capacity" for absorbing mobility program placements and further modeling of dynamic response.housing policy, multiple equilibria, negative externality, optimal control, segregation, separation, Skiba point

A non-autonomous optimal control model of renewable energy production under the aspect of fluctuating supply and learning by doing

Given the constantly raising world-wide energy demand and the accompanying increase in greenhouse gas emissions that pushes the progression of climate change, the possibly most important task in future is to find a carbon-low energy supply that finds the right balance between sustainability and energy security. For renewable energy generation, however, especially the second aspect turns out to be difficult as the supply of renewable sources underlies strong volatility. Further on, investment costs for new technologies are so high that competitiveness with conventional energy forms is hard to achieve. To address this issue, we analyze in this paper a non-autonomous optimal control model considering the optimal composition of a portfolio that consists of fossil and renewable energy and which is used to cover the energy demand of a small country. While fossil energy is assumed to be constantly available, the supply of the renewable resource fluctuates seasonally. We further on include learning effects for the renewable energy technology, which will underline the importance of considering the whole life span of such a technology for long-term energy planning decisions.Austrian Science Fund (FWF

Why present-oriented societies undergo cycles of drug epidemics

Musto (The American Disease, Yale University Press, New Homen, 1987) hypothesizes that cycles of drug use arise when the current generation of youth no longer remembers the adverse experiences of their forebears. This paper underlines this hypothesis through the results of an optimal control model of drug epidemics that incorporates an endogenous initiation function, models the reputation of a drug as being determined by memories of past use, and finds the optimal drug treatment strategy. Interestingly, unless the societal discount rate is quite low, if memories of past users decay moderately quickly, the optimal strategy is cyclic. Hence, not only do we find that ‘those who forget the past are condemned to repeat it’, but also that ‘for those who forget the past and over-value the present it may even be optimal to have their future recreate the past’. These findings are illustrated by numerical analysis based on empirical data from the current US cocaine epidemic

Estimating the relative efficiency of various forms of prevention at different stages of a drug epidemic

Drug use and problems change dramatically over time in ways that are often described as reflecting an “epidemic cycle”. We use simulation of a model of drug epidemics to investigate how the relative effectiveness of different types of prevention varies over the course of such an epidemic. Specifically we use the so-called LHY model (see, Discussion Paper No. 251 of the Institute of Econometrics, OR, and Systems Theory, Vienna University of Technology, Vienna, Austria, 2000) which includes both “contagious” spread of initiation (a positive feedback) and memory of past use (a negative feedback), which dampens initiation and, hence, future use. The analysis confirms the common sense intuition that prevention is more highly leveraged early in an epidemic, although the extent to which this is true in this model is striking, particularly for campaigns designed to preserve or amplify awareness of the drug's dangers. The findings also suggest that the design of “secondary” prevention programs should change over the course of an epidemic

When in a drug epidemic should the policy objective switch from use reduction to harm reduction?

A heated debate in drug policy concerns the relative merits of "harm reduction" (e.g., reducing drug-related HIV/AIDS transmission) vs. "use reduction" (controlling drug use per se). This paper models whether shifting emphasis between these goals over the course of a drug epidemic might reduce social costs relative to pursuing one or the other exclusively. Results suggest different answers for different drugs and/or countries. In particular, harm reduction may have always been effective for Australia's injection drug use problem, but for US cocaine it may not have been in the past even if it could be so today. In certain circumstances harm reduction may "tip" an epidemic toward a high- rather than low-use equilibrium. The location in state space of regions where this occurs can be sensitive to parameter changes, suggesting caution may be in order when advocating harm reduction, unless there is confidence the epidemic has been modeled and parameterized accurately.OR in societal problem analysis Control Health Drug policy Epidemics